Facing Reality

Rosa Brooks, columnist for the Los Angeles Times, sees the U.S. economy in the same situation as The Titanic bearing down on the iceberg (Obama's, and Our, Iceberg). She faults both McCain and Obama for underestimating the seriousness of the economic situation and the long term prospects for recovery from the crisis. Addressing the October 7 debate, she writes:

And when asked by Brokaw if the economy will get "much worse before it gets better," Obama's response was quick: "No. I'm confident about the American economy."

Really? I'm not.

The main problem, as I see it, is the inability or refusal of our political leaders to recognize what all this means for the United States and for its citizens. We have reached the end of a long period of prosperity--but it was a prosperity built on debt. The current crisis signals the end of the line. As Rosa Brooks astutely points out, nobody "yet" knows how to solve these problems. But the first step in solving a problem is recognizing it. Only then can we begin to fix it.

(Thanks to Vivian Deno for sending this column to me).

A Power That May Not Stay So Super

New York Times economist David Leonhardt, who is one of the few economists to raise alarms about the long-term structural problems of the U.S. economy, had a column on Oct. 11 that compares the decline of the British empire to the current situation of the U.S. His story raises many of the issues I address in The End of the American Century, including the long-term growth of deficits, debts and excessive consumption, as well as the pressing needs for spending on infrastructure, health, Social Security and Medicare.

Is the bartender finally presenting us the bill?

Washington Post columnist Eugene Robinson has a column today in the Indianapolis Star entitled "A Rude awakening from the American dream." He, like most of us, is bewildered by the economic upheavals and wonders if this means that the U.S. will become poorer and if the "next generation of Americans [will] lead lives of less affluence and comfort."

"I want to know if this is some kind of financial reckoning for the way we've been living so far beyond our means. Is the bartender finally presenting us the bill for our tab?"

He worries, as we all do, that this economic crisis "may be more than just an episode."

"I'm worried that what's at stake is not just a few years of lost economic growth, but our traditional notion of the American dream."

He wants straight talk from Obama and McCain.

"Don't give me empty words about American exceptionalism. Tell me in plain language what our new place is in the world and how we're going to give our children the good life that we've enjoyed."

I second all of these sentiments by Mr. Robinson, but I fear the answers are not what he would like to hear. We do need straight talk and truthtelling from our leaders, but it will mean facing up to the reality that the U.S. place in the world will be diminished, and our children will not have the affluence that we have enjoyed--mostly on borrowed money. But a good life can be built on other things than consumerism and instant gratification.

Reality and Hope

Last spring, I delivered the annual "Last Lecture" at Butler University, in which I reflected on the challenges of remaining hopeful in the face of relentless, dismal news. The transcript of that talk appears here.

America Loses Global Economic Leadership

Over the last decade, the U.S. has lost political, military and international influence in the world; now it has lost its economic clout as well. The collapse of the financial system in the United States, the very linchpin of both the American and global economies, has evoked comments of gleeful retribution from some countries, and worrisome concern from others. But everywhere, now, there is a recognition that the U.S. economy is weak and vulnerable, and hardly a model for emulation by others. The collapse of this final pillar of U.S. global leadership is also encouraging other countries to assume a more assertive role.

Some of the sharpest criticism, and even sarcasm, came from the usual suspects. Venezuela’s Hugo Chavez mocked Lehman Brothers

“They were always producing negative reports about Venezuela. . . .They forgot about themselves ... and 'boom!' they were bankrupt." (Toronto Star, 9/16/08)

and then skipped the opening of the UN General Assembly to visit China instead, saying that Beijing was now much more relevant than New York.

At a meeting of the Nonaligned Movement in Tehran, Iranian President Mahmoud Ahmadinejad proclaimed that

“the big powers are going down. . . .They have come to the end of their power, and the world is on the verge of entering a new promising era.” (NYT 7/30/08).

But even more moderate leaders have echoed such sentiments. The president of Argentina, Christina Fernandez de Kirchner declared that

“We are witnessing the First World, which at one point had been painted as a mecca we should strive to reach, popping like a bubble.” (NYT 10/3/08)

In Latin America, according to the New York Times (10/3/08), governments “have been working for the past decade to reduce their dependence on the American economy,” have “diversified trade with the rest of the world,” and have set aside funds “for times when international conditions turn sour.”

In Moscow, both former President (now Premier) Putin and his successor, Dmitri Medvedev, have been flexing Russia’s diplomatic and military muscles for several years. The Kremlin has repeatedly rejected U.S. global dominance in a “unipolar” world, and with its landmark conflict with Georgia in August, asserted its own “privileged” sphere of influence in the world, “just like other countries in the world.”(NYT 8/31/08). With the U.S. economic crisis, Medvedev, like Kirchner, has called into question even U.S. economic leadership. He asserted last week that U.S. global economic leadership was drawing to a close. “The times when one economy and one country dominated are gone for good.” (NYT 10/3/08).

While the U.S. financial crisis has accelerated these moves away from the U.S. economy, the trend had begun years before, and is an integral part of the decline of U.S global influence more generally. Surveys in recent years by the Pew Global Attitudes Project found surprisingly little support in other countries for “the American ways of doing business.” Antipathy to the U.S. business model is particularly widespread and strong in Latin America and western Europe. In the 2007 Pew survey, in only a third of the 46 countries surveyed did a majority of respondents like the American ways of doing business. Most of those were in Africa.

For most of the postwar era, the United States has been both a political and economic model for countries and peoples around the world. This began to wane in recent years, especially in the face of the belligerent and unilateralist policies of the Bush administration. The financial collapse of the U.S. is one more nail in the coffin of U.S. supremacy and global dominance.

The Book is Out!

My book, The End of the American Century, has been published! It is available now from the publisher (Rowman & Littlefield) and online booksellers (see links above) and should soon be in bookstores as well.

U.S. Economic Future Looks Bleak, Even With Bailout

A slightly revised version of my previous blog ("This sucker could go down") has been published in The Indianapolis Star (9/30/08), the day after the biggest stock market decline in U.S. history.